Acorda Reports Second Quarter 2020 Financial Results

Acorda Therapeutics, Inc. (NASDAQ: ACOR) today provided a business update and reported its financial results for the second quarter ended June 30, 2020.

“We were pleased with INBRIJA’s performance in the second quarter, especially in light of the significant disruption of COVID-19. Net sales increased by 7% over the first quarter, and dispensed cartons, which reflect actual demand, increased by 13%. This trend continued into July, with dispensed cartons increasing 8% over June, to the highest number since the beginning of the launch,” said Ron Cohen, M.D., Acorda's President and Chief Executive Officer. “We also saw several indications that our programs to improve the experience of patients and physicians are having a positive effect. INBRIJA new prescription requests, which declined dramatically beginning in mid-March, began to rebound in late April and have continued to increase through July. We also saw a 6% increase in new prescribers in the quarter, and the percent of new prescription requests that converted to filled prescriptions increased to 75%, up from 57% in Q1, the highest rate since launch.”

Dr. Cohen continued, “We incurred higher-than-expected Medicare rebates in the first half of the year, which impacted net sales. We believe that such rebates are likely to be lower in the second half of 2020, as more patients get through the Medicare Part D donut hole.”

Second Quarter 2020 Financial Results

For the quarter ended June 30, 2020, the Company reported INBRIJA net revenue of $4.7 million, compared to $3.0 million for the same quarter in 2019.

For the quarter ended June 30, 2020, the Company reported AMPYRA net revenue of $26.1 million compared to $44.2 million for the same quarter in 2019. In September 2018, AMPYRA lost its exclusivity and generics entered the market. Consequently, the Company expects AMPYRA revenue to continue to decline.

Research and development (R&D) expenses for the quarter ended June 30, 2020 were $5.3 million, including $0.4 million of share-based compensation compared to $19.0 million, including $0.8 million of share-based compensation for the same quarter in 2019.

Sales, general and administrative (SG&A) expenses for the quarter ended June 30, 2020 were $38.7 million, including $1.5 million of share-based compensation compared to $50.2 million, including $3.5 million of share-based compensation for the same quarter in 2019.

Change in fair value of derivative liability for the quarter ended June 30, 2020 was $8.9 million.

Provision for income taxes for the quarter ended June 30, 2020 was $0.6 million compared to a provision for income taxes of $0.2 million for the same quarter in 2019.

The Company reported a GAAP net loss of $17.4 million for the quarter ended June 30, 2020, or $0.37 per diluted share. GAAP net loss in the same quarter of 2019 was $27.5 million, or $0.58 per diluted share.

Non-GAAP net loss for the quarter ended June 30, 2020 was $16.6 million, or $0.35 per diluted share. Non-GAAP net loss in the same quarter of 2019 was $26.3 million, or $0.55 per diluted share. This quarterly non-GAAP net loss measure, more fully described below under “Non-GAAP Financial Measures,” excludes share-based compensation charges, non-cash interest charges on our debt, changes in the fair value of acquired contingent consideration, and changes in the fair value of the derivative liability. A reconciliation of the GAAP financial results to non-GAAP financial results is included with the attached financial statements.

At June 30, 2020, the Company had cash, cash equivalents, short-term investments and restricted cash of $103.8 million compared to $168.9 million at year end 2019. Restricted cash includes $37.3 million in escrow related to the 6% semi-annual interest portion of the convertible note exchange completed in December 2019. If the Company is permitted under the terms of the notes and elects to pay interest due in stock, the restricted cash will be released from escrow.

For the full-year 2020, Acorda continues to expect AMPYRA net revenue to be $85 - $110 million, and operating expenses to be $170 - $180 million. The operating expense guidance is a non-GAAP projection that excludes restructuring costs and share-based compensation as more fully described below under “Non-GAAP Financial Measures.”

Webcast and Conference Call

The Company will host a conference call today at 4:30 p.m. ET. To participate in the Webcast/Conference call, please note there is a new pre-registration process.

• To register for the Webcast, use the link below: 
          https://event.on24.com/wcc/r/2395726/EF22DB54EC8EDBD04D72B50A619971E1

• To register for the Conference Call, use the link below: 
          http://www.directeventreg.com/registration/event/5378839 
          **When registering please type your phone number with no special characters**.

A replay of the call will be available from 8:30 p.m. ET on August 4, 2020 until 11:59 p.m. ET on September 3, 2020. To access the replay, please dial [phone] (domestic) or [phone] (international); reference code 5378839. The archived webcast will be available in the Investor Relations section of the Acorda website at www.acorda.com.

Non-GAAP Financial Measures

This press release includes financial results prepared in accordance with accounting principles generally accepted in the United States (GAAP), and also certain historical and forward-looking non-GAAP financial measures. In particular, Acorda has provided non-GAAP net loss, adjusted to exclude the items below, and has provided 2020 operating expense guidance on a non-GAAP basis. Non-GAAP financial measures are not an alternative for financial measures prepared in accordance with GAAP. However, the Company believes the presentation of non-GAAP net loss, when viewed in conjunction with our GAAP results, provides investors with a more meaningful understanding of our ongoing and projected operating performance because this measure excludes (i) non-cash compensation charges and benefits that are substantially dependent on changes in the market price of our common stock, (ii) non-cash interest charges related to the accounting for our outstanding convertible debt which are in excess of the actual interest expense owing on such convertible debt, as well as non-cash interest related to the Fampyra monetization, and acquired Biotie debt, (iii) changes in the fair value of acquired contingent consideration which do not correlate to our actual cash payment obligations in the relevant periods, (iv) asset impairment charges that are not routine to the operation of the business, (v) changes in the fair value of the derivative liability which is a non-cash charge and not related to the operation of the business, and (vi) expenses that pertain to a non-routine restructuring event. The Company believes its non-GAAP net loss measure helps indicate underlying trends in the Company's business and is important in comparing current results with prior period results and understanding projected operating performance. Also, management uses this non-GAAP financial measure to establish budgets and operational goals, and to manage the Company's business and to evaluate its performance.

In addition to non-GAAP net loss, we have provided 2020 operating expense guidance on a non-GAAP basis, as the guidance excludes restructuring costs and share-based compensation charges. Due to the forward-looking nature of this information, the amount of compensation charges needed to reconcile these measures to the most directly comparable GAAP financial measures is dependent on future changes in the market price of our common stock and is not available at this time. Non-GAAP financial measures are not an alternative for financial measures prepared in accordance with GAAP. However, the Company believes that the presentation of this non-GAAP financial measure, when viewed in conjunction with actual GAAP results, provides investors with a more meaningful understanding of our ongoing and projected operating performance because it excludes (i) expenses that pertain to a non-routine restructuring, and (ii) non-cash charges that are substantially dependent on changes in the market price of our common stock. We believe this non-GAAP financial measure helps indicate underlying trends in the Company’s business and is important in comparing current results with prior period results and understanding expected operating performance. Also, management uses this non-GAAP financial measure to establish budgets and operational goals, and to manage the Company's business and to evaluate its performance.

About Acorda Therapeutics

Acorda Therapeutics develops therapies to restore function and improve the lives of people with neurological disorders. INBRIJA (levodopa inhalation powder) is approved for intermittent treatment of OFF episodes in adults with Parkinson’s disease treated with carbidopa/levodopa. INBRIJA is not to be used by patients who take or have taken a nonselective monoamine oxidase inhibitor such as phenelzine or tranylcypromine within the last two weeks. INBRIJA utilizes Acorda’s innovative ARCUS pulmonary delivery system, a technology platform designed to deliver medication through inhalation. Acorda also markets the branded AMPYRA (dalfampridine) Extended Release Tablets, 10 mg.

Forward-Looking Statements

This press release includes forward-looking statements. All statements, other than statements of historical facts, regarding management's expectations, beliefs, goals, plans or prospects should be considered forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including: we may not be able to successfully market INBRIJA or any other products under development; the COVID-19 pandemic, including related quarantines and travel restrictions, and the potential for the illness to affect our employees or consultants or those that work for other companies we rely upon, could have a material adverse effect on our business operations or product sales; our ability to raise additional funds to finance our operations, repay outstanding indebtedness or satisfy other obligations, and our ability to control our costs or reduce planned expenditures and take other actions which are necessary for us to continue as a going concern; risks associated with complex, regulated manufacturing processes for pharmaceuticals, which could affect whether we have sufficient commercial supply of INBRIJA to meet market demand; third party payers (including governmental agencies) may not reimburse for the use of INBRIJA or our other products at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block prescriptions; competition for INBRIJA, AMPYRA and other products we may develop and market in the future, including increasing competition and accompanying loss of revenues in the U.S. from generic versions of AMPYRA (dalfampridine) following our loss of patent exclusivity; the ability to realize the benefits anticipated from acquisitions, among other reasons because acquired development programs are generally subject to all the risks inherent in the drug development process and our knowledge of the risks specifically relevant to acquired programs generally improves over time; the risk of unfavorable results from future studies of INBRIJA (levodopa inhalation powder) or from our other research and development programs, or any other acquired or in-licensed programs ; the occurrence of adverse safety events with our products; the outcome (by judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class action litigation; failure to protect our intellectual property, to defend against the intellectual property claims of others or to obtain third party intellectual property licenses needed for the commercialization of our products; and failure to comply with regulatory requirements could result in adverse action by regulatory agencies.

These and other risks are described in greater detail in our filings with the Securities and Exchange Commission. We may not actually achieve the goals or plans described in our forward-looking statements, and investors should not place undue reliance on these statements. Forward-looking statements made in this press release are made only as of the date hereof, and we disclaim any intent or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

Financial Statements

Acorda Therapeutics, Inc. Condensed Consolidated Balance Sheet Data (in thousands) (unaudited)
	June 30,				December 31,
	2020				2019
Assets
Cash, cash equivalents and short-term investments	$	65,988			$	125,839
Restricted cash - short term		13,015				12,836
Trade receivable, net		14,773				22,083
Other current assets		31,308				15,134
Inventories, net		32,940				25,221
Property and equipment, net		141,685				142,527
Intangible assets, net		382,505				402,329
Restricted cash - long term		24,819				30,270
Right of use assets, net		21,166				23,450
Other assets		11				29
Total assets	$	728,210			$	799,718
Liabilities and stockholders' equity
Accounts payable, accrued expenses and other current liabilities	$	52,110			$	65,335
Current portion of lease liability		7,896				7,746
Current portion of royalty liability		8,470				10,836
Current portion of contingent consideration		2,276				1,866
Current portion of loans payable		67,478				603
Convertible senior notes		131,756				192,774
Derivative liability related to conversion option		23,953				59,409
Non-current portion of acquired contingent consideration		67,724				78,434
Non-current portion of lease liability		20,277				22,995
Non-current portion of royalty liability		11,769				13,565
Non-current portion of loans payable		25,532				25,495
Deferred tax liability		17,075				9,581
Other long-term liabilities		990				259
Total stockholder's equity		290,904				310,820
Total liabilities and stockholders' equity	$	728,210			$	799,718

Acorda Therapeutics, Inc. Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2020				2019				2020				2019
Revenues:
Net product revenues	$	30,793			$	47,191			$	55,465			$	88,525
Royalty revenues		2,824				2,862				6,251				5,665
Total net revenues		33,617				50,053				61,716				94,190
Costs and expenses:
Cost of sales		6,658				9,397				10,501				18,196
Research and development		5,255				18,959				12,960				34,987
Selling, general and administrative		38,656				50,195				79,764				102,921
Amortization of intangible assets		7,691				7,691				15,382				10,255
Asset impairment		—				—				4,131				—
Change in fair value of derivative liability		(8,928	)			—				(35,456	)			—
Change in fair value of acquired contingent consideration		(6,164	)			(12,800	)			(9,847	)			(5,400	)
Total operating expenses		43,168				73,442				77,435				160,959
Operating loss	$	(9,551	)		$	(23,389	)		$	(15,719	)		$	(66,769	)
Other expense, (net)		(7,299	)			(3,883	)			(14,601	)			(8,823	)
Loss before income taxes		(16,850	)			(27,272	)			(30,320	)			(75,592	)
(Provision for) benefit from income taxes		(571	)			(214	)			6,427				501
Net loss	$	(17,421	)		$	(27,486	)		$	(23,893	)		$	(75,091	)
Net loss per common share - basic	$	(0.37	)		$	(0.58	)		$	(0.50	)		$	(1.58	)
Net loss per common share - diluted	$	(0.37	)		$	(0.58	)		$	(0.50	)		$	(1.58	)
Weighted average common shares - basic		47,705				47,486				47,704				47,480
Weighted average common shares - diluted		47,705				47,486				47,704				47,480

Acorda Therapeutics, Inc. Non-GAAP Net Loss and Net Loss per Common Share Reconciliation (in thousands, except per share amounts) (unaudited)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2020				2019				2020				2019
GAAP net loss	$	(17,421	)		$	(27,486	)		$	(23,893	)		$	(75,091	)
Pro forma adjustments:
Non-cash interest expense (1)		4,052				3,780				8,107				8,497
Change in fair value of acquired contingent consideration (2)		(6,164	)			(12,800	)			(9,847	)			(5,400	)
Restructuring costs (3)		—				—				343				—
Asset impairment charge (4)		—				—				4,131				—
Gain on change in fair value of derivative liability (5)		(8,928	)			—				(35,456	)			—
Share-based compensation expenses included in Cost of Sales		86				207				167				357
Share-based compensation expenses included in R&D		448				783				864				1,483
Share-based compensation expenses included in SG&A		1,522				3,544				3,001				6,361
Total share-based compensation expenses		2,056				4,534				4,032				8,201
Total pro forma adjustments		(8,984	)			(4,486	)			(28,690	)			11,298
Income tax effect of reconciling items above (6)		(9,835	)			(5,680	)			(11,655	)			(11,023	)
Non-GAAP net loss	$	(16,570	)		$	(26,292	)		$	(40,928	)		$	(52,770	)
Net loss per common share - basic	$	(0.35	)		$	(0.55	)		$	(0.86	)		$	(1.11	)
Net loss per common share - diluted	$	(0.35	)		$	(0.55	)		$	(0.86	)		$	(1.11	)
Weighted average common shares - basic		47,705				47,486				47,704				47,480
Weighted average common shares - diluted		47,705				47,486				47,704				47,480

(1)	Non-cash interest expense related to convertible senior notes, Biotie non-convertible and R&D loans and Fampyra royalty monetization.
(2)	Changes in fair value of acquired contingent consideration related to the Civitas acquisition.
(3)	Costs associated with a corporate restructuring initiative.
(4)	Asset Impairment charge related to BTT1023 acquired in the Biotie acquisition.
(5)	Reduction in the fair value of the derivative liability related to the 2024 convertible notes.
(6)	Represents the tax effect of the non-GAAP adjustments.

 

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